Whether you’re looking to renovate, relocate, or move into a retirement village or aged care facility, here are some important considerations.
Which retirement living option best suits you?
When you’re planning your retirement, your living options may play a big part in your financial and emotional situation, whether you’re considering:
- downsizing your home
- relocating to a different city or state
- renovating your existing home, or
- moving into a retirement village or into aged care.
We’ve explored some of the most common retirement living options in more detail, from independent living to assisted living, so you can feel more informed when you’re making a decision either for yourself or on behalf of a loved one.
What to think about if you’re downsizing your home, relocating or both
For many Australians, retirement is the ideal time to downsize and free up extra money, to enjoy a change of scenery. If you’d like to downsize your home or relocate somewhere completely new—or both—there will be a variety of things you may need to have a look at.
Financial considerations when downsizing or relocating
One of the main factors in your decision to relocate or downsize is your finances, so it’s worth looking at:
- What property and rental prices are like in the area, and if they’re affordable within your retirement plan.
- How the general cost of living stacks up when it comes to groceries, eating out, transport and health.
- What out-of-pocket expenses you might be looking at, such as connecting and disconnecting utilities, removalist fees, any capital gains tax when you sell your property, and stamp duty if you’re planning on purchasing a home in Australia.
- Whether the money from your potential property sale could affect the results of income and asset tests for any age pension entitlements you may be eligible to receive.
- If you’re 65 or over and downsizing, you may be eligible to take advantage of the downsizer super contribution. This is a voluntary after-tax super contribution of up to $300,000 per person (or $600,000 per couple) using the proceeds from selling your main property.
Non-financial considerations when downsizing or relocating
Finances only make up part of the picture. You’d want to spend your retirement in a place you love, so it’s worth thinking about:
- How far it’s located from your family and friends, and whether you know anyone in the place you’re thinking of moving to.
- What local amenities are close by, such as supermarkets, restaurants, transportation options, or medical facilities.
- Whether the area is big on community events, if there are recreation facilities nearby (like parks, libraries, or leisure centres) and club associations you can join like Leagues and Rotary.
- What the weather is like throughout the year and whether it’s going to suit you.
- How the job market stacks up in case you decide to step back into the workforce.
- What the crime rate is like.
If you’re not too sure about some of these things, that’s okay. However, downsizing and/or relocating for retirement is a significant step, so it might be worth trialling the type of place or area you’re thinking about moving to first, either by visiting the neighbourhood and getting familiar with it, or by renting there for a few months first.
What to think about if you’re renovating your existing home
You may be thinking about renovating your home to make it more accessible for your future needs. This may also delay the need to consider moving into an assisted living facility, such as a retirement village or nursing home.
The good news is if this is something you’d like to do, such as installing handrails and ramps, widening doorways, installing emergency alarms and monitoring systems, there may be government subsidies1 to help you cover the costs.
If you’re looking for more information on subsidies for renovating your home, you can either check out the government’s My Aged Care website or call 1800 200 4221.
What to think about if you’re moving into a retirement village
Retirement villages are designed to give retirees a comfortable living environment with a range of facilities and a strong sense of community.
Today, the average age of new residents entering retirement villages is 752, and many existing residents say their motivations to move into a retirement village had to do with3:
- wanting to downsize while they could
- their former home becoming too big to manage
- wanting freedom from house responsibilities to pursue other interests.
Retirement villages have different living options and offer a range of health, leisure, and support services, depending on whether you’re choosing an independent living centre or an assisted living arrangement.
- Independent living centres typically have minimal assistance in day-to-day living but plenty of medical and recreational facilities, such as community halls, bowling greens, libraries and pools.
- Assisted living centres offer more support with house responsibilities and maintenance, such as housekeeping, cleaning or preparing meals.
Payment models for retirement villages
There are many different payment models when it comes to retirement villages, depending on whether it’s an independent living or assisted living centre. However, some typical costs you may come across include an entry contribution (which may be refundable), an exit fee and ongoing charges to cover things like maintenance and general services provided by the village.
How different villages charge can vary significantly, and some residents may be subject to different fee structures, which could also change over time. This is why it’s important to be aware of any traps out there, and consider speaking to a legal professional before signing anything.
What to consider if you’re looking into aged care
More than 50% of people over age 45 were previously or are currently dealing with aged care services for themselves, or on someone else’s behalf4. By considering your options in aged care earlier rather than later, you may be able to provide yourself or a loved one with greater flexibility and freedom down the line.
Here are some of the main options in aged care.
- Getting help in your own home—If you’re generally able to manage, but require assistance with daily tasks and maintenance, there are various home-care packages available to suit your needs.
- After-hospital (transition) care—If you’ve been in hospital and need assistance while you recover, you can arrange after-hospital service to be provided either in your own home or ‘live-in’ setting for 12 to 18 weeks.
- Respite care—This service provides support for you and your primary carer when your carer has other duties to attend to, or if they’re away (such as on holiday).
- Residential aged care—This is where you live in a full-service residence and receive ongoing care and support while you live there. These aren’t the same as retirement villages or other independent living centres, which provide facilities but not necessarily the same level of support and care that you may need later in life. If you think this is the best option for you or your loved one, it’s a good idea to research and visit several residences to find the right fit.
- Short-term restorative care—This provides a range of services over eight weeks to help prevent or slow down difficulties with completing everyday tasks. The purpose of short-term restorative care is to delay or reverse the need to enter a more permanent, long-term aged care solution.
To be eligible for the various aged care services, you have to meet certain criteria and pass an assessment process. This can be organised through the government’s My Aged Care service.
Also keep in mind that the costs of different aged care services vary and may depend on your income and assets. These are typically assessed by the Department of Human Services or the Department of Veterans’ Affairs.
1 My Aged Care - About the Commonwealth Home Support Programme - Services
2 PwC / Property Council Retirement Census 2016 page 3
3 The McCrindle Baynes Villages Census Report 2013 page 5
4 Superannuation well placed to play a role in health and aged care funding and advice: ASFA - table
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